Imposition of excessive tariffs on China, Mexico, and Canada by the US is probably going to assist Indian exporters in growing their shipments to the American market, in accordance with specialists.
Sectors that may be benefited embrace agriculture, engineering, machine instruments, clothes, textiles, chemical compounds, and leather-based, they added.
India was the fourth-largest gainer when the US imposed increased duties on Chinese language items throughout US President Donald Trump’s first tenure.
The Trump administration is imposing 25 per cent tariffs on Mexico and Canada and it’ll take impact on Tuesday.
The US has additionally doubled the tariff on all Chinese language imports to twenty per cent.
With these tariffs on imports from Canada and Mexico, India has a chance to discover various sourcing choices for key commodities which will change into extra competitively priced from these nations, assume tank GTRI stated.
Canada, particularly, provides a number of merchandise that align with India’s main import wants.
In 2024, the US imported crude petroleum oil price USD 103 billion, refined petroleum oil price USD 12.9 billion, and fertilisers (USD 3.1 billion) from Canada. It additionally sourced copper cathodes (USD 1.3 billion), gold (USD 4.3 billion), ethylene polymers (USD 2.2 billion), and plastics (USD 2.1 billion).
India’s import demand in these classes is substantial – USD 140.3 billion in crude oil, USD 42.5 billion in gold, USD 2.8 billion in copper, USD 2.2 billion in ethylene polymers, USD 1.3 billion in plastics, and USD 1.3 billion in fertilisers.
“With US tariffs possible making Canadian merchandise extra aggressive within the world market, India may consider sourcing these commodities from Canada at probably decrease prices, strengthening its commerce partnership whereas lowering dependence on different high-cost suppliers,” GTRI founder Ajay Srivastava stated.
President-designate of Federation of Indian Export Organisations (FIEO) SC Ralhan stated tariffs on China, Mexico and Canada may assist Indian exporters in sectors like agriculture, engineering, machine instruments, and clothes.
Tariffs would have an effect on exports from these three nations to the US as they’d push the costs of their items within the American market, making them much less aggressive.
“Indian exporters must faucet into these alternatives,” Srivastava stated.
The escalation within the commerce battle is anticipated to assist India enhance its exports and appeal to investments from American corporations, GTRI famous.
In his first time period, Trump changed NAFTA with USMCA (US-Mexico-Canada FTA) in 2018-19, arguing it was outdated and harm American staff, Srivastava stated.
“Now, he’s once more sad together with his personal deal and has imposed 25 per cent tariffs on Canada and Mexico beginning right now, violating USMCA’s phrases. This highlights his disregard for negotiated commerce agreements. To keep away from an analogous scenario, India needs to be cautious about negotiating a complete FTA with the US,” he famous.
“Worse, on the negotiating desk, the US might demand India not simply tariff cuts but additionally further concessions, akin to opening authorities procurement, lowering agricultural subsidies, weakening patent safety, and permitting unrestricted knowledge flows, calls for India has resisted for many years.” As an alternative of an FTA, Srivastava stated India might provide a “Zero-for-Zero Tariff” deal by proposing to remove tariffs on most US industrial merchandise, supplied America does the identical for Indian items.
